Bonded labor and serfdom: a paradox of voluntary choice

Among the oldest and most pervasive economic institutions are bonded labor and serfdom. While seemingly exploitative, both bonded labor and serfdom ar e often not imposed on the laborers but voluntarily chosen. It is generally the lack of suitable alternatives which makes workers opt for a life in se rvitude. This paper shows that the existence of these voluntary forms of se rvitude itself may restrain the laborers' opportunities so that they are le ft with no better alternative than bondage. Under these circumstances, gove rnment interventions banning servile institutions, by promoting the develop ment of alternative options for the laborers, have the potential to substan tially improve the condition of a large class of laborers. (C) 2002 Elsevie r Science B.V. All rights reserved.